Knight-Swift (KNX) Stock Up 9.2% Despite Q4 Earnings Miss
Knight-Swift Transportation Holdings Inc.KNX stock has gained 9.2% since its fourth-quarter 2022 earnings release on Jan 26.
Quarterly earnings of $1.00 per share missed the Zacks Consensus Estimate of $1.13 and fell 37.9% year over year. Total revenues of $1,743.62 million lagged the Zacks Consensus Estimate of $1,779.9 million and declined 4% year over year.
Total operating expenses (on a reported basis) increased 4.5% year over year to $1.54 billion. Knight-Swift’s adjusted operating income fell 39.3% year over year.
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Knight-Swift Transportation Holdings Inc. price-consensus-eps-surprise-chart | Knight-Swift Transportation Holdings Inc. Quote
Revenues (excluding fuel surcharge and inter-segment transactions) in the Truckload segment totaled $920.82 million, down 7.2% year over year. Results were hurt by 8.6% decrease in average revenue per tractor. Adjusted segmental operating income fell 36.4% to $159.72 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 800 basis points (bps) to 82.7%.
The Less-Than-Truckload (LTL) segment, which includes the results of AAA Cooper Transportation, a leading LTL carrier acquired by Knight-Swift in July 2021, generated revenues (excluding fuel surcharges) worth $203.99 million in the December quarter, up 14.7% year over year. Adjusted segmental operating income grew 70.6% to $29.56 million. Adjusted operating ratio (operating expenses as a percentage of revenues) fell 480 bps to 85.5%.
Revenues in the Logistics segment (excluding inter-segment transactions) amounted to $173.16 million, down 42.2% year over year. Segmental adjusted operating income decreased 48.1% to $23.47 million. The adjusted operating ratio rose 150 bps to 86.4%.
Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $112.92 million, down 8.6% year over year. The segmental operating ratio (on a reported basis) rose to 94.7% in the reported quarter from 81.2% in the year-ago quarter.
Liquidity, Dividends & Buyback
Knight-Swift exited the fourth quarter with cash and cash equivalents of $196.77 million compared with $194.08 million at the end of September 2022. Additionally, long-term debt (excluding current maturities) of $1.02 billion was flat sequentially.
In 2022, KNX returned $300 million to its shareholders in the form of share repurchases and $78.3 million as dividends.
For 2023, Knight-Swift expects adjusted earnings per share in the range of $4.05-$4.25. The Zacks Consensus Estimate of $4.13 lies within the guidance.
KNX expects net cash capital expenditures for 2023 in the band of $640 million-$690 million. The tax rate is expected to be 25% for 2023.
Currently, Knight-Swift carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
United Airlines’ UAL fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
Delta Air Lines’ DAL fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
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